NBN Co orders $500 million of fibre cables

NBN Co has awarded half a billion dollars worth of contracts to cable makers Corning and Prysmian in deals expected to create about 450 local manufacturing jobs.

The two companies will be charged with manufacturing ribbon cable, where strands of fibre run parallel to each other.

Corning was expected to supply aerial cabling while Prysmian's cables would go underground.

Corning has an initial order from NBN Co worth $400 million and a five-year deal that could be worth $1.2 billion.

Prysmian – perhaps better known by its former name, Pirelli Cables & Systems – won an initial order worth $150 million, although its own five-year contract could be worth twice that.

Although more than half of the orders placed with Corning were expected to be made locally, the company said that some of the initial cable would be sourced from its international plants.

However, Corning was expected to invest $25 million into a factory at Clayton, Melbourne, buying new equipment, retraining staff and creating "300 to 400" jobs.

"Corning will invest in additional cable plant and equipment to manufacture specialised ribbon cable and expand its cable sheathing operations as part of a commitment to manufacture a high proportion of its fibre optic cable for NBN Co in Australia," NBN Co said in a statement.

Corning will also "localise the manufacture of fibre distribution hubs and has committed to a recruitment and training program to ramp-up its Australian operations," NBN Co said.

The ramped-up Australian operations were expected to be ready for deployment next year.

In addition to aerial cables, Corning would provide "selected types of splice closures and feeder and drop cables which will connect individual user premises to the fibre network."

Prysmian said it would employ 50 new people at plants in Dee Why and Liverpool in Sydney over the next five years.

It also said it would spend $13 million upgrading its plants.

"Prysmian will invest in additional cable plant and equipment to manufacture specialised ribbon cable locally and expand its cable sheathing operations as part of a commitment to source approximately 80 percent of the value of its contract with NBN Co in Australia," NBN Co said.

"It will also localise the manufacture of all Prysmian's rodent-proof and high-strength cable in Australia."

NBN Co chief Mike Quigley highlighted the importance of the two companies' investment commitments at a launch in Melbourne today.

"Part of our purchasing strategy is to make a substantial up front purchase commitment to encourage suppliers to invest in their Australian supply chain ramp-up as we head to volume rollout," he said.

"They can invest with confidence in plant, equipment, recruitment and training to meet the needs of our national project."

NBN Co was expected to award further component contracts for its passive network this year.

Today NBN Co also awarded a $110 million deal to Warren & Brown to manufacture optical distribution frames and sub-racks and to assemble connectors.